This Morning: Debating the Bank of AAPL, BBRY Gets a Thumbs Up

By Tiernan Ray

Here are some things going on this morning in your world of tech:

Shares of Apple (AAPL) are up $1.36 at $456.06, a bright spot in an otherwise down market, following a blistering performance by hedgie David Einhorn of Greenlight Capital on CNBC this morning, during which he pleaded with shareholders to block Apple’s request they vote to prevent issuance of preferred shares. Einhorn thinks Apple could issue preferred shares with a 4% dividend yield as a way to correct what he sees as a gross mis-valuation of the shares.

And in Apple matters of less consequence, CNBC also cited a tweet this morning by Republican Florida senator Marco Rubio, who remarked “Why do I have to get so many different chargers for #apple? I am edging closer to #samsung with each passing day.” (I would note that Apple has one cable for all “i” products, and it has changed only once in ten years, so I’m not sure what Rubio is talking about.)

Thumbs up for BB10

Shares of BlackBerry (BBRY) are higher by 60 cents, or almost 4%, at $16.65, after Wells Fargo transferred coverage of the stock this morning from Jennifer Fritzsche to Maynard Um, who promptly upgraded the shares to Outperform from Market Perform, with a “valuation range” of $19 to $20. Um thinks “the valuation does not fit the current potential window of opportunity,” in front of the new BB10 handsets.

“While it may very well turn out that demand for BlackBerry 10 is limited, we believe the valuation already discounts some level of failure and think the risk/reward at this juncture of the BlackBerry 10 cycle is attractive,” writes Um.

Defending Yelp

Shares of Yelp (YELP) are under pressure this morning, falling $1.84, or 8%, at to $20.54, following its deeper-than-expected Q4 loss last night, on revenue that just barely surpassed analysts’ estimates. I’ve not seen any ratings changes so far this morning, and Cantor Fitzgerald’s Youssef Squali, who rates the shares Buy, actually raised his price target to $27 from $24, writing that “Traction with mobile and Europe and integration of Qype in coming months should add to Yelp’s momentum in 2013, in our view.”

CTSH rising

Shares of outsourcing firm Cognizant Technology Solutions (CTSH) are up 68 cents, or 0.9%, at $76.95, after the company this morning reported Q4 revenue in line with expectations, at $1.95 billion, but beat on the bottom line, reporting 99 cents versus 91 cents. The company projects Revenue this quarter in line, and a slightly higher profit, at $2 billion and $1.01 versus Street’s $2 billion and 93 cents. For the full year, the company projects “at least” $8.6 billion in revenue and “at least” $4.31 per share in adjusted profit, above the average $8.58 billion and $4.01 the Street is modeling. (Correction: An earlier version misrepresented Cognizant’s forecast for revenue this year as being substantially ahead of estimates when in fact it was only slightly higher. My apologies for any confusion caused by the error.)

Google’s still mobile-challenged

Shares of Google (GOOG) are down $3.88, or half a percent, at $766.29, as Sterne Agee‘s Shaw Wu initiates coverage with a Neutral rating. He’s concerned theInternet’s big shift to mobile is something that will continue to dog the company.

“With Android, the company is clearly building a very large base of mobile users but like many of its technology peers, the big question is whether it can monetize in a big way, which only AAPL and Samsung Electronics (005930KS) (so far) have been able to do.

“Our key concern is that this mobile transition may be tougher and take longer than consensus thinking.”

Speaking of Google, and mobile, The Wall Street Journal‘s Amir Efratilate yesterday reported that the company has made a change to its ad sales policy, requiring customers to buy space on mobile devices as part of a package.

“Under Google’s change, dubbed “enhanced campaigns,” the company also said it will require advertisers to pay for ads on tablets even if they just want to reach personal-computer users.”

Pondering a Yahoo!-Google tie-up

Responding to last night’s announcement by Yahoo! (YHOO) that it will feature some ads from Google on its properties, J.P. Morgan‘s Doug Anmuth this morning writes that Yahoo! is right to sell inventory through Google because it should “improve pricing while also letting Yahoo! focus its sales efforts on large advertisers.” However, he doesn’t think there will be a move to partner with Google on search given Yahoo!’s current agreement with Microsoft (MSFT).

Google typically gives 68% of its revenue to publisher partners in AdSense, he observes, but “Yahoo! could bring a significant amount of inventory to Google and therefore likely has more leverage than the average AdSense publisher.”

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There are 5 comments

FEBRUARY 7, 2013 10:27 A.M.

Tim wrote:

Now Apple has to be told how to run their company because of their incompetent management team and board. What a joke Apple has become..

FEBRUARY 7, 2013 10:50 A.M.

Anonymous wrote:

Hmmmm, Apple sound like it's following the old RIM again, maybe Thor can give them a few pointers. I expect to see Apple in the same transitional stage within the next few years as we did BBRY.

FEBRUARY 7, 2013 11:26 A.M.

Rottan Frewt wrote:

Apple = value trap
Shareholders aren't going to get a thing out of this tight-fisted company. Investors would be wise to stay clear. The only thing holding this stock up from a shareholders point of view is a broken wing and a prayer. Any new negative rumors will send Apple into a tailspin to $400. If I just blogged something about a delay of the iPhone 5S I could knock Apple's share price down $20 in just a few minutes. When a company like Netflix has more confident shareholders than Apple, you definitely need to avoid Apple. Apple shareholders are scared of their own shadows. With that kind of limp-wrist mentality, Apple's share price will never rise to any degree.

FEBRUARY 7, 2013 11:29 A.M.

moneybags wrote:

Apple will experience a fall from grace that will be epic. By that time, BBRY stock will be surpassing its all time highs. This should all transpire with in a year.

FEBRUARY 7, 2013 4:21 P.M.

Jocca wrote:

I like my iTV experience so far because I get to choose the program I want to watch, whenever I want to watch it. All this being done without being interfered with ads. The future of TV watching is already here in my home, and Google will not be part of it.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.